Token Description & Project Background

Kaspa is an open-source, scalable, and decentralized Layer-1 blockchain that utilizes Proof of Work for achieving consensus. It was initially created by Yonatan Somplinsky, a former Harvard researcher known for developing the GHOSTDAG protocol. The Kaspa community prides itself on embracing decentralization and adhering the principles established by the Bitcoin Network. 

The native currency of the Kaspa Network is the KAS coin, which is used to reward miners for validating and securing the network. KAS was fairly distributed without any token sale, pre-mining or team allocations. It was exclusively distributed to individuals actively contributing to network consensus. These are the fundamentals that the community relies on for comparing itself to Bitcoin Network.

From a technical standpoint, the Kaspa Network aims to differentiate itself by utilizing blockDAG, a structure said to provide advanced scalability, high throughput, and near-instantaneous confirmations, all while upholding decentralization as a fundamental principle. Unlike traditional blockchains, which orderly record transactions in sequential and securely sealed blocks, a blockDAG represents blocks as vertices in a directed acyclic graph, with connections between them representing parent-child relationships. 

Risks of KAS

Like an investment in other crypto assets, there are some general risks to investing in KAS. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement. 

In addition to these general risks, an investment in KAS is subject to the following specific risks:

• The Layer-1 blockchain space faces significant competition, and the Kaspa team has not provided any guarantees about their direct involvement in the long-term roadmap/development – they act in a ministerial manner. Moreover, there has been no direct capital raised for the project’s future development. Any potential success will rely on the efforts of a global community of miners and developers contributing to the network.

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with KAS. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The Kaspa community is not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of KAS have no recourse to Kaspa core developers, community, or Uphold if KAS declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing KAS on the Uphold Platform, Uphold performed due diligence on KAS and determined that KAS is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance usage, lack of token sales/funding and technical mechanics, including the source code being open source and peer-reviewed, security, and roadmap for growth in the developer community and, the lack of influence or majority holding of the Kaspa founder or key contributors.
• Marketing materials issued by the core team and community.
• The supply, demand, maturity, utility, and liquidity of KAS.
• Material technical risks associated with KAS, including any code defects, security breaches and other threats concerning KAS and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with KAS, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of KAS.

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific to Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or the Risks Specific to Holding Digital Assets.

Last updated on Feb 14, 2024.